We’re hiring! The ASC has multiple openings available for Securities Analysts. Hear the team explain why their role is unlike anything else available for a CPA, CA.
The ASC reviews complaints made against individuals or companies involved in trading securities in Alberta. If the actions of these individuals or companies suggest possible breaches of Alberta securities laws, further investigation may be warranted. Documents will be reviewed, investors and others may be interviewed, and evidence will be gathered and analyzed to determine whether one or more breaches have occurred. A formal hearing may then be initiated, where a tribunal will rule whether breaches took place and, if so, whether to impose administrative sanctions to protect the public and enforce compliance with regulatory requirements. The ASC can also prosecute individuals or companies in the Provincial Court of Alberta.
Generally, complaints may take several weeks to several months to investigate. Complex complaints may take longer to resolve. Many complaints do not lead to enforcement action by the ASC, for jurisdictional or other reasons. If enforcement action has been taken against an individual or a company, this information is a matter of public record and is available on the Enforcement Orders or Proceedings pages on the ASC website. However, unless and until such public proceedings occur, our confidentiality rules mean that we do not reveal the status of investigations, even to complainants.
As with other regulatory or enforcement agencies, the Alberta Securities Commission must release information to the fullest extent possible, while ensuring the process of investigations and conduct of the proceedings are not prejudiced.
Under the Securities Act, the Commission cannot comment publicly as to the existence, status, or nature of an investigation being conducted. This is intended to protect the integrity of the investigation, ensure the complaint process is not used to affect the market and be just to those who are the subject of investigations.
If enforcement action has been taken against an individual or a company, this information is a matter of public record and available from the Enforcement Orders database or on the Proceedings page.
We must be able to contact complainants for more information, so we strongly urge complainants to provide contact information. Further, the identity of complainants is kept confidential to the extent permitted by law. While we do not prohibit anonymous complaints, it is rare that we can take effective follow-up action on complaints that are submitted anonymously.
Due to the limitation period set out in the Securities Act, the ASC can only take proceedings respecting breaches that occurred within the preceding six years. If you have a complaint, you should forward it to the ASC as soon as possible.
If 48 hours have passed since you signed, you will need to talk to a lawyer to determine what actions you might be able to take.
If your complaint is of a minor nature and does not reflect on the integrity of your adviser or salesperson, you should talk to your salesperson or adviser as soon as possible. If this does not resolve the matter, or if your complaint is of a serious nature, send a written complaint to the firm that employs the individual you are dealing with. Request a meeting with the branch manager or compliance officer of the firm to discuss your concerns. If the matter still remains unresolved, you should file a written complaint with one of the governing regulatory organizations:
If the investment adviser is employed by a member firm of the Investment Industry Regulatory Organization of Canada (IIROC) you should file your complaint directly with IIROC. Visit its website at www.iiroc.ca to search whether the firm is an IIROC member.
If the salesperson is employed by a member firm of the Mutual Fund Dealers Association (MFDA), you should file your complaint directly with MFDA. Visit its website at www.mfda.ca to search whether the firm is a member of the MFDA.
If your dealer/adviser or salesperson is employed by a firm that is NOT an IIROC or MFDA member, file your complaint with the ASC. If you are unclear as to which organization to contact, you can contact the ASC's Information Officer at 403-355-4151 and he or she may be able to tell you what regulatory body can best address your complaint.
Under the Securities Act, all financial advisers must ensure that they collect sufficient information about their client so that they can determine if a trade is suitable. This information is known as Know Your Client (or KYC) information. When providing this information to your financial adviser, you should ensure that it is as accurate as possible, as your adviser will use this information to make investment recommendations. If you are unsure about any of your KYC answers, discuss them with your financial adviser before you make any investments.
There is also a requirement under the new proceeds of crime and anti-terrorism laws for your financial adviser to ask you the source of the funds. However, you are not required to divulge information like credit card numbers or bank PINs to these individuals.
At the time of opening your account, you and your financial adviser should have filled out a New Client Account Form, which asks you for your investment needs and objectives, your investment knowledge level, and your personal risk tolerance level. This information is known as Know Your Client (or KYC) information and is very important, as it will allow the financial adviser to determine what investments are suitable for you. When providing this information to your financial adviser, you should ensure that it is accurate, as your adviser will use this information to make their investment recommendations. If you are unsure about any of your KYC answers, discuss them with your financial adviser before you make any trades.
If you feel that your financial adviser purchased securities that are not in line with your KYC information, you should contact your financial adviser to discuss the matter. If your financial adviser does not adequately satisfy your concerns, you should contact the branch manager or compliance officer of the firm to discuss your complaint. If the matter still remains unresolved, you will need to contact IIROC, the MFDA, or the ASC with specific details of the investment, your KYC information, and any steps you have taken to resolve the issue.
The practice of buying and selling securities without contacting the client beforehand is called discretionary trading. Mutual fund salespeople are not allowed to conduct discretionary trades on your account and must contact you prior to making any transactions. If your mutual fund salesperson has ordered transactions in your account without your express permission, you should contact the compliance department of the mutual fund dealer that employs your adviser. If this does not satisfy your concerns, please contact the MFDA with specific details of your complaint.
Some investment advisers may be able to conduct discretionary trades, provided that you have given them explicit written consent. These accounts are called discretionary or managed accounts. If your account is not a discretionary or managed account, you should contact the firm's Branch Manager and/or Compliance Officer to discuss the trades that occurred on your account. If the matter still remains unresolved, contact either IIROC or the ASC with specific details of the complaint.
If you have concerns over the length of time it took your financial adviser to place your order, you should contact him and ask for an explanation of the delay. If the delay was a relatively short period of time, your financial adviser may have a reasonable explanation for you (i.e. depending on the time your order was placed, the type of order, etc.). However, if your order was not placed for an extended period, you should contact the branch manager or compliance officer of the firm to discuss the order in question. If the matter still remains unresolved, contact IIROC or the MFDA.
When you transfer from one dealer to another, it will take some time for your accounts to be transferred. This should usually take about one month dependent on the type of account and/or investment. If your transfer has not been completed, you should have your new financial adviser contact your former dealer to determine the status of the transfer. There may be fees involved in transferring your account out and these will need to be settled prior to your accounts being moved. If your financial adviser is unable to resolve the matter, you should contact the branch manager or compliance officer of your former dealer. If your accounts have still not been transferred, contact the Investment Industry Regulatory Organization of Canada (IIROC), the Mutual Fund Dealers Association (MFDA), or the ASC.
With some limited, specific exemptions, anyone who sells securities in Alberta or provides advice about investing in securities must be registered with the MFDA, IIROC or ASC.
You can check registration or contact the ASC at 1-877-355-4488 or firstname.lastname@example.org to find out if a person or company is registered. We will be able to tell you if the person is registered in the National Registration Database, in what jurisdictions and in what capacity.
A “broker” is a commonly used term for someone who arranges a transaction between a buyer of a security, and a seller of a security, and usually receives a commission for doing so. Technically, the term for such a person is either “dealing representative” or “advising representative”, depending upon the services the person provides – see National Instrument 31-103 for more details. Generally, such activity is prohibited unless the person is registered to do so.
You can confirm registration with the ASC and get a report on your adviser with the Investment Industry Regulatory Organization of Canada (IIROC).
Leveraging, or using borrowed money to invest, can be appropriate in some situations and inappropriate in others. You should discuss with your Adviser, Branch Manager and/or Compliance Officer any concerns you have related to your account handling. If not resolved, contact the MFDA, IIROC, or the ASC, dependent on the firm.
There are several options for reporting potentially fraudulent investment schemes. You can contact your local police department, the RCMP, or the ASC. Additionally, you can use an internet-based tool for reporting economic crimes online ("RECOL"), located at www.recol.ca, to make a complaint regarding any fraud, like identity theft, fraudulent letter or telemarketing scams, and other white-collar crimes.
With the increasing awareness of investment fraud, it is particularly useful to submit to Recol information regarding four specific areas that are described as follows:
A Cease-Trade Order (CTO) means a company cannot sell any of its shares. This includes private placements and exchanging loans for shares. While a Cease Trade Order is in effect, the company cannot promote its shares or perform any sales functions in anticipation of the CTO being revoked.
If a company has been cease-traded by the Commission, it is often because the company has been delinquent in filing its financial statements. In other situations, it may mean the company has failed to file other required documents with the Commission, or that there are errors or deficiencies with such documents. The Cease Trade Order will remain in effect until such time that the company files acceptable financials or otherwise corrects the deficiencies, and successfully makes an application to the Commission for a Revocation Order. If you believe a company might be subject to a Cease Trade Order, you can search the National Cease Trade Orders Database.
Beware of investment opportunities that state that they will let you invest early, when the company is still private, and then reap large rewards when the company is listed on a public exchange. Under securities law, companies cannot state that they are going to be listed before the appropriate exchange/securities commission gives them permission to do so.
If you have invested in a company like this and have not heard anything, you should contact the individual who sold the investment to you. They may be able to offer some information to you on the status of the company. You should also contact the ASC with details about exactly what you were told.
Depending on how your shares are registered, you may not receive actual share certificates. If your shares are registered in "street" form, the transfer agent holds these securities in trust for you. If your shares are registered in "bearer" form, your name should be on the certificates. If you would like to receive the actual share certificates of a publicly traded company, contact the investor relations department of the company or the company's transfer agent. Please note that you may be charged a fee for this service.
If you are a shareholder and have not received any shareholder or proxy-related materials from a company, you should contact your investment adviser to determine whether you have completed the required forms to have your name placed on the company's mailing list. If you have filled out the appropriate forms and have not received these materials, you should contact the investor relations department of the company.
You will need to know the current name of the company and if the company is still active. You can search the ASC's reporting issuer list; you can seek the assistance of a financial adviser; and you can contact a local branch of Alberta Registries. Sometimes the company itself can provide guidance through its website or by contacting its head office. You may also contact ASC Public Inquiries/Customer Service Line for assistance.
Shareholder rights are set out in the corporate law under which a company is incorporated. Shareholders can take legal action against a company through the courts. For a company incorporated in Alberta, the Alberta Business Corporations Act is the applicable law. For a company incorporated federally, the Canada Business Corporations Act is the applicable law.
You may wish to consult with legal counsel to determine what your rights as a shareholder are and what remedies may be available to you.
You can find out information about a company from its disclosure documents, which include financial statements, prospectuses, news releases, material change reports, information circulars, and other documents.
Public companies are required to file their financial statements and other disclosure documents on the System for Electronic Disclosure Analysis and Retrieval (SEDAR). You can access these documents via the following link - SEDAR.
For other legal matters relating to the company not directly involving the ASC you can consult local court records or do a general internet search.
The ASC maintains a Reporting Issuer list that identifies:
For tax related questions, please contact Canada Revenue Agency or the Tax and Revenue Administration of the Government of Alberta Ministry of Finance.
For information about taxes and investing, including RRSPs and TFSAs, please visit the Canada Revenue Agency website (www.cra-arc.gc.ca). You may also want to consider seeking the advice of a registered financial adviser.
One of the top ten investing mistakes is "doing the wrong thing at the wrong time". If you have a good investment plan, there's less need to panic when markets fall. If you do have a plan, take the opportunity to reassess your risk tolerance and investment objectives. If you don't have a plan, take the time to make one (use the services of a financial adviser or planner if you need assistance) and stick to it through the ups and downs. Read a previous Investor Watch for more tips on investing in a volatile market and check out our blog on six ways to avoid investment fraud in a volatile market.
Most people aim for a rate of return that is greater than inflation - otherwise you experience "inflation risk" where the value of your income decreases as inflation shrinks the purchasing power of a currency. As the level of return for an investment is related to the level of risk for that investment, you will need to determine what level of risk you are willing to take for the return you want. Your tolerance for risk may depend on:
The ASC isn't able to provide advice. While it is good to be aware of what is going on in current news, be wary of jumping on investments because they seem trendy at the moment. It's always important to have a clear idea of what your investment goals are and the level of risk you can or can not afford to take before you make any investment decision.
It's important to distinguish the difference between investing in real estate as an investment for personal occupation (generally not considered to be a sale of a security under the Securities Act in Alberta) and investing in real estate that is a security.
For instance, if a buyer purchases a piece of real estate for a set price to take ownership on a set date, that is likely a real estate transaction. However, if the seller retains ownership of the property and a buyer purchases an interest in the property, or its owner expects a return on his or her investment and neither plays a role in the management of it nor occupies the property as tenant, then the transaction may be the sale of a security.
Find out some red flags to watch for with real estate investment opportunities.
"Cold calling", where people are approached by strangers via a phone call, text message or email is often a red flag. These types of offers should be treated with caution and there are a number of questions you should be asking yourself such as:
Find out more about red flags of investment fraud.
When you use the services of a financial adviser, be sure to ask them upfront about their fees and the fees of the investment products. Fees are set between the firm offering the investment and the client (you, the investor). There are no mandated maximums or minimums. It is always a good idea to discuss fees with your adviser before signing any paperwork. Examples of questions you could ask include:
For more information, visit Checkfirst.ca.
There are plenty of online resources and investment software packages out there to choose from. We can't recommend any particular site, but suggest you carefully look into any terms and conditions, as well as potential costs involved with such services. Try to find a service that is offered by a reputable organization or company and ensure that any personal information you submit would be treated securely.
The ASC does not order restitution to get investors' money back for them. That would have to be done via the courts. If an investor has lost money due to a violation of securities law, they should obtain legal advice to determine what options - such as the civil courts - are available to them.
It's important to note that there is a difference between insider trading and illegal insider trading.
Illegal insider trading involves buying or selling a security of a "reporting issuer" (for example, a company whose securities are traded on an exchange) with knowledge of material information about the company that hasn't been publicly announced (undisclosed material information).
Material information refers to information that would reasonably be expected to affect the market price or value of a security of that company, and can include everything from financial results to executive appointments to operational events.
If you are in a "special relationship" with a public company, it is against securities laws to:
For information about insider trading - including the definition of an insider – check out NI 55-104 and the CSA Enforcement Report.
We hire court reporters from Dicta Court Reporting Inc. to transcribe oral evidence given in public hearings. If you wish to obtain a copy of the transcript of a public ASC hearing, you may contact Dicta Court Reporting Inc. to obtain it for a fee.
The ASC is funded by the combination of revenues received under Alberta securities laws from market participants (e.g. fees) and its own investment income.
Anyone participating in the Alberta capital market, including anyone located in Alberta who trades in securities or anyone who trades in securities with residents of Alberta, comes under the authority of the ASC. To see a list of other securities regulators across Canada, visit the website of the Canadian Securities Administrators.